Financial Risk Manager Part 2

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Explanation:

The Sharpe ratio is calculated as: $\text{Sharpe Ratio} = \frac{R_p - R_f}{\sigma_p}$ $\text{Sharpe Ratio} = \frac{14\% - 4\%}{25\%} = \frac{10\%}{25\%} = 0.40$

The Treynor measure is calculated as: $\text{Treynor Measure} = \frac{R_p - R_f}{\beta_p}$ $\text{Treynor Measure} = \frac{14\% - 4\%}{1.15} = \frac{10\%}{1.15} \approx 0.087 \approx 0.09$

Thus, the correct answer is D.

Explanation:

The Sharpe ratio is calculated as: $\text{Sharpe Ratio} = \frac{R_p - R_f}{\sigma_p}$ $\text{Sharpe Ratio} = \frac{14\% - 4\%}{25\%} = \frac{10\%}{25\%} = 0.40$

The Treynor measure is calculated as: $\text{Treynor Measure} = \frac{R_p - R_f}{\beta_p}$ $\text{Treynor Measure} = \frac{14\% - 4\%}{1.15} = \frac{10\%}{1.15} \approx 0.087 \approx 0.09$

Thus, the correct answer is D.

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Q.3177 Jack Shiller is a portfolio manager at Quandra Investment. He has gathered the following information: Thunder Growth Fund generated returns of 14% with a standard deviation of 25% and a Beta of 1.15. The index return over the same period is 12% with a standard deviation of 18% and a Beta of 1.00.

If the risk-free rate is currently 4%, which of the following represents the Sharpe ratio and the Treynor measure, respectively, for the Thunder Growth Fund?

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Last updated: July 5, 2026 at 07:23

0.56 and 0.12

0.70 and 0.19

0.08 and 0.02

0.40 and 0.09